FTSE 100 hits all-time high as defence stocks soar

The FTSE 100 index rallied to an all-time high on Monday morning, bolstered by surging defence stocks as European countries signalled their willingness to up defence spending over the weekend.

The UK’s blue-chip index rose 0.4 per cent or 32 points after the market opened.

BAE Systems led the market higher. The firm’s stock jumped 17 per cent.

Rolls-Royce also helped send the FTSE 100 to new heights, with the Derby-headquartered giant up nearly six per cent on Monday.

The firm, one of the FTSE’s top performers, has shot up over 30 per cent in the last five days after announcing a £1bn buyback in its annual results.

A bumper morning for European indexes

So far this year, the FTSE 100 has added nearly eight per cent.

The FTSE 250 also enjoyed a small bump on Monday morning as it jumped 0.2 per cent. Defence plays Babcock, Qinetiq and Chemring led the index higher.

Other major European indexes also jumped on Monday. Germany’s Dax index rose 0.34 per cent or 76.55 points.

The German stock market was joined by fellow European indexes, France’s CAC 40 and Belgium’s BEL 20, both of which ticked higher off the back of strength in defence names despite President Trump’s looming threats of tariffs. 

CAC 40 was up 0.06 per cent with a 7 point increase and BEL 20 grew 0.31 per cent, up 13.52 points.

Richard Hunter, head of markets at interactive investor, said: “With neither particular exposure to the mega cap tech risks nor indeed, at least for the moment, to tariff threats, the UK has ploughed ahead, with the premier index increasingly garnering investor attention given its perceived defensive qualities. 

“Having finished February at a record closing high, March has also started on a sprightly footing, with the FTSE 100 making further progress in early trade.”

Tip Ranks analyst Neil Wilson said: “London’s FTSE 100 closed at a record on Friday and extended higher early in trading on Monday, now up 7 per cent year to date.

“The DAX also rallied as Rheinmetall surged another 15 per cent this morning.

“There is suddenly a lot of extra cash for defence.”